As the energy sector rebounds, oil and gas service companies are looking for competitive advantages where they can invest to grow profitably. Is blockchain the answer?
Blockchain is a distributed ledger system that is secured through the authentication of each transaction. When a block is created, it is timestamped. The block record cannot be modified, and it is publicly visible to all consented parties. The system’s transparent nature and permanency of each transaction makes the system highly secure and the data within it highly reliable.
Blockchain gained public attention through the rise of Bitcoin and cryptocurrency, and since then has been used to authenticate all types of transactions – from medical records to identity management to inventory traceability.
“The business value-add of blockchain will exceed $3.1 Trillion by 2030.”
GARTNER REPORT: G00325744
Blockchain for oil & gas companies
While blockchain is not yet a mainstream technology, signs are pointing toward it becoming a major disruptor in the oil and gas industry. Blockchain technology could be used to validate transactions throughout the oil and gas industry supply chain from source to the consumer.
Several leading oil and gas companies have already begun incorporating blockchain technology into their business processes. As the blockchain concept and supporting technologies become more commonplace, blockchain could be used for:
- Tracking the transport of hydrocarbons and other materials from exploration site to consumer
- Reliably distinguishing energy sources (solar vs. coal)
- Securely monitoring changes in contracts, inventory items and equipment maintenance
- Demonstrating compliance of environmental impact governance rules by providing visibility to regulators in real-time
- Speeding up transactions by eliminating the need for intermediaries like banks and brokers
- Reducing theft and fraud through transparency at every step of the process
Because the oil and gas industry is so complex and heavily regulated, it appears ideal to further explore blockchain technology and develop real-world use-cases. Imagine how much administrative and processing time could be eliminated!
Microsoft blockchain technology
Organizations using Microsoft infrastructure and business solutions such as Microsoft Dynamics 365 will be happy to know that Microsoft is committed to bringing blockchain to the enterprise. In launching the Coco framework, Microsoft leveraged existing open-source blockchain protocols to build an enterprise-ready blockchain framework.
Coco helps organizations remain flexible, as the framework is compatible with any blockchain protocol. However, the framework’s main advantage is its scalability and compatibility with Microsoft’s on-premise, hybrid, and cloud-based applications, including access to the Azure ecosystem. Applications can be built on top of blockchain as a shared data and security layer.
Microsoft recognizes that enterprise customers will have specific needs around scalability, confidentiality and distributed governance. In the video below, you can see how the Coco blockchain distributed ledger can be used to manage contracts and purchase orders across the supply chain.
Exploring blockchain technology
Like any emerging technology, there is a certain amount of hype that surrounds blockchain. Savvy CIOs and business executives will need to research:
- The realities of what blockchain can (and cannot) do
- Where blockchain might fit into your business strategy
- What changes the oil and gas industry can expect when major industry players start embracing blockchain
- What investments you’ll need to make in IT infrastructure and business process engineering
- The resources you’ll need to implement blockchain
At MCA Connect, helping energy companies improving business efficiency is our passion. We would love to help you explore blockchain – and all the possibilities it presents.
Find Out Your IoT Maturity
Take this 9-question survey to find out how mature your company is in IoT and how ready you are to begin an IoT project if not already started.Take the Survey
Author: Brad Smith, Director, IoT Analytics